Member Article

APD putting brake on economic growth

Air Passenger Duty is costing the UK 91,000 jobs and is putting a brake on economic growth, according to new research.

The World Travel and Tourism Council has found that by removing the controversial tax almost 100,000 jobs would be created, as well as injecting a further £4.2 billion into the UK economy.

Air Passenger Duty is set to rise again in the near future, and in the next 12 months, it is estimated that the UK Government will collect an extra £2.8 billion in tax from air travellers. This is far higher than any other country.

David Scowsill, World Travel and Tourism Council President and CEO believes that the tax is damaging the economy at a crucial time.

He commented: “Air Passenger Duty is a completely disproportionate tax on people’s holidays and is hitting business travel hard.

“When the economy needs help, it is economically illogical to continue with a tax that costs the country some 91,000 jobs and as much as £4.2 billion.

“Travel & Tourism grew by 4.1% in the UK last year, but is forecast to slow to 1.3% in 2012. This slowdown is partly due to the impact of Air Passenger Duty, which is dampening demand.”

Graeme Mason, planning and corporate affairs director at Newcastle International, supported Mr Scowsill’s observations on Air Passenger Duty.

He said: “APD in the UK is at an unacceptably high level, and that is before the double inflation rise comes in from April 2012.

“This damaging tax sets the UK apart from the countries we are competing with and puts us at a serious disadvantage.

“It is particularly damaging to regional air services. For this reason we propose the government looks again at the structure of APD. This issue is so important that we will not stop making the case for reform.”

Passenger Duty, which he believes is already having a negative effect on trade with countries in the Caribbean, Africa and Asia.

Martin Craigs, CEO of the Pacific Asia Travel Association added: “The UK is an island trading nation, air services are the vital lifeblood of modern global commerce but the UK Air Passenger Duty is now the world’s highest by a wide margin.

“It is certainly turning away tourism and trade from the world’s fastest growing economic region Asia Pacific”

The Government introduced Air Passenger Duty in 1994 at £5 to offset carbon emissions from the aviation industry.Today passengers travelling to the Asia Pacific region pay an extra £85 on flights.

This was posted in Bdaily's Members' News section by Ruth Mitchell .